Superannuation Discussion + market volatility

[JohnK]

The superannuation rort has been a nice little earn for some financial advisers thanks to suckers like me.

I worked for a company between 2003 and 2005 and the superannuation funds were with Colonial Mutual. When I left the company the superannuation funds were then transferred from the company superannuation account to Colonial Mutual superannuation account. That was over 10 years ago.

Fast forward to today and I look at superannuation account to find the balance has decreased from previous year. Why? Only 0.28% growty for the year. Ok so why decrease in balance? Not only are they charging me an administration fee but they are charging me a financial adviser fee. A financial adviser who I have never seen or spoken to ever and they have been taking a cut from my superannuarion. Seriously?

Called today and was told that I needed to call Colonial Mutual to remove the financial adviser from my account. Seriiusly? Yes I know I should have noticed earlier but whst a nice little rort going on there. Why aren't these things audited?

Asked for exit forms. The consultant couldn't care less and emailed me the forms.

I'd hate to think how much superannuation I have wasted in useless fees. If there are no contributions to a superannuation account they shouldn't be charging admin fees. What are they doing that requires a fee to be charged?

Now what? Think my daughter is going to be angry with her dads carefree attitude to money.

 

[serfty]

...

Now what? ...

I suspect it's not a large amount, given their readiness to send you the forms.

Transfer the lot to something like ING living super ... no "fees" although in their case they do force a 0.5% reduced earn on a minimum $500, so there's a $2.50 annual hit.

 

[love_the_life]

Re: The totally off-topic thread

JohnK, when I moved super last year the new superannuation provider did the rollover and I didn't have to complete exit forms. They handled it all - much easier.

 

[amaroo]

Re: The totally off-topic thread

Smsf =

........

 

[serfty]

Re: The totally off-topic thread

Smsf = 

........

May not be worthwhile, especially if there is less than $200k in it ...

 

[RooFlyer]

Re: The totally off-topic thread

Smsf = 

........

That was going to be my suggestion, but not for every one of course.

May not be worthwhile, especially if there is less than $200k in it ...

No, you'd have to aggregate.

 

[JohnK]

Re: The totally off-topic thread

I suspect it's not a large amount, given their readiness to send you the forms.

Transfer the lot to something like ING living super ... no "fees" although in their case they do force a 0.5% reduced earn on a minimum $500, so there's a $2.50 annual hit.

Not a large amount by any stretch of the imagination. Not to them anyway but ~$18,000 is quite large. We used to be with ING at some point but they moved away from them. They are now with ANZ Smart Choice.

Are they any good? Have a sizeable balance with them over the last 8 years employment but all my superannuation wouldn't be anywhere near $200,000. I may get to that amount if I work another 4-5 years. So much for compulsory superannuation and saving for retirement. Hahaha.

 

[Princess Fiona]

Re: The totally off-topic thread

One of my major regrets is that I didn't move here and start working while defined benefits super was still a thing

 

[cove]

Re: The totally off-topic thread

About 5 years ago I started working less hours so I switched our superannuation to a self run fund. We get an annual fee for admin of $799 for the two of us for the accounting and audit and no trailing fees to anyone.
If you earn 7% net annually your money doubles in 10 years or if you earn 10% net annually your money doubles in 7 years.
Defined benefits superannuation was an incredibly bad idea for employers but just wonderful for anyone who signed on to that scheme.

 

[MEL_Traveller]

Re: The totally off-topic thread

Not a large amount by any stretch of the imagination. Not to them anyway but ~$18,000 is quite large. We used to be with ING at some point but they moved away from them. They are now with ANZ Smart Choice.

Are they any good? Have a sizeable balance with them over the last 8 years employment but all my superannuation wouldn't be anywhere near $200,000. I may get to that amount if I work another 4-5 years. So much for compulsory superannuation and saving for retirement. Hahaha.

You might want to check out an Industry Fund to see if that performs better for you.

 

[Deleted member]

Re: The totally off-topic thread

The superannuation rort has been a nice little earn for some financial advisers thanks to suckers like me.

I worked for a company between 2003 and 2005 and the superannuation funds were with Colonial Mutual. When I left the company the superannuation funds were then transferred from the company superannuation account to Colonial Mutual superannuation account. That was over 10 years ago.

Fast forward to today and I look at superannuation account to find the balance has decreased from previous year. Why? Only 0.28% growty for the year. Ok so why decrease in balance? Not only are they charging me an administration fee but they are charging me a financial adviser fee. A financial adviser who I have never seen or spoken to ever and they have been taking a cut from my superannuarion. Seriously?

Called today and was told that I needed to call Colonial Mutual to remove the financial adviser from my account. Seriiusly? Yes I know I should have noticed earlier but whst a nice little rort going on there. Why aren't these things audited?

Asked for exit forms. The consultant couldn't care less and emailed me the forms.

I'd hate to think how much superannuation I have wasted in useless fees. If there are no contributions to a superannuation account they shouldn't be charging admin fees. What are they doing that requires a fee to be charged?

Now what? Think my daughter is going to be angry with her dads carefree attitude to money.

If you are experiencing a decrease in your account it will have little or nothing to do with fees. (Unless you are invested in fixed interest which is about as silly as you can get , or those fees are very , double digit high) the real reason your funds have decreased in "value" is market movement.
This is where "most" people make their silliest mistake, they sell low , thereby locking in their decrease (loss) .
After over 30 years in this business I have heard stories like this before, and giving you the benefit of the doubt I will say only this. There is much more to this story than you have told here.

 

[Deleted member]

Re: The totally off-topic thread

JohnK, when I moved super last year the new superannuation provider did the rollover and I didn't have to complete exit forms. They handled it all - much easier.

Which is what John k did and is now complaining about it.
Abdicating responsibility for your super and how it's run by leaving it to the government and industry funds is in fact not as smart as the advertising would have you believe. Aside from dishonest actions by unscrupulous people, the scandals in The press have been around poor benefits and conditions. (Designed by the one size fits all suppliers) , tailored to a price point, the proposition that you get what you pay for is a relevant today as it has ever been. In spite of what some will have you believe , seeking good advice is smart. It all comes down to what "value" you you seek, vs what price you seek.

 

[Deleted member]

Re: The totally off-topic thread

Not a large amount by any stretch of the imagination. Not to them anyway but ~$18,000 is quite large. We used to be with ING at some point but they moved away from them. They are now with ANZ Smart Choice.

Are they any good? Have a sizeable balance with them over the last 8 years employment but all my superannuation wouldn't be anywhere near $200,000. I may get to that amount if I work another 4-5 years. So much for compulsory superannuation and saving for retirement. Hahaha.

It's (one path / ANZ ) the same company. Except the government has interfered and the new order is "my super". Beware it isn't always the best option.

 

[Deleted member]

Re: The totally off-topic thread

One of my major regrets is that I didn't move here and start working while defined benefits super was still a thing

Defined benefit schemes are generally unfunded ( the government funds) are a drain on the public purse. No unlike MP's super in many ways.

As an interesting aside. GM (in the LOTFAP) are now described as a pension fund that makes cars.
The joys of defined benefits schemes.

 

[Deleted member]

Re: The totally off-topic thread

About 5 years ago I started working less hours so I switched our superannuation to a self run fund. We get an annual fee for admin of $799 for the two of us for the accounting and audit and no trailing fees to anyone.
If you earn 7% net annually your money doubles in 10 years or if you earn 10% net annually your money doubles in 7 years.
Defined benefits superannuation was an incredibly bad idea for employers but just wonderful for anyone who signed on to that scheme.

That would be the cheapest super fund in the country.
I too run my own super fund. And the figures you are quoting would mean someone is losing money. ASIC and other statutory fees, plus audit and accounting in my find are much higher. (I do my own advice as I am licensed to do so) other than cash I am unaware of "any" investment that doesn't have some cost / fee component. Property for example , where the vast majority of smsf's invest , rates, insurance, body corporate fees maintained etc. These are costs that would be called fees in a property trust.

 

[cove]

Re: The totally off-topic thread

GPH I left out the ASIC fee in my post on superannuation. That $799 fee is very reasonable for accounting and audit but I have the responsibility of investing the funds and that has gone really well. I am now changing my risk profile due to getting older. No point in getting torched in a savage stock market sell off at or near retirement age is what I am thinking.

 

[Deleted member]

Re: The totally off-topic thread

$799.00 is Bargain basement price for accounting and audit fees. most audit fees are between $300-$500. so your accountant must work for free.
You may be the exception to the rule, BUT in my 32 years in the industry , a SMSF that runs for less that $2000.00 PA is regarded as cheap, and that doesn't include advice or investment costs.
BUT again I make the point, is cost your benchmark? or value?
I have had many people tell me over the years that an industry fund is much cheaper than a retail fund and the (sub) funds are rated very highly on returns. all of that is true, BUT when you design and maintain your own actively manged investment mix, the results are frequently better than the One size fits all approach of an industry fund.
but hey, at the end of teh day, it's horses for courses

GPH I left out the ASIC fee in my post on superannuation. That $799 fee is very reasonable for accounting and audit but I have the responsibility of investing the funds and that has gone really well. I am now changing my risk profile due to getting older. No point in getting torched in a savage stock market sell off at or near retirement age is what I am thinking.

 

[RooFlyer]

Re: The totally off-topic thread

$799.00 is Bargain basement price for accounting and audit fees. most audit fees are between $300-$500. so your accountant must work for free.
You may be the exception to the rule, BUT in my 32 years in the industry , a SMSF that runs for less that $2000.00 PA is regarded as cheap, and that doesn't include advice or investment costs.
BUT again I make the point, is cost your benchmark? or value?
<snip>

My SMSF auditing and accounting fees (small-medium Sydney accounting firm) are about $1,500pa and includes some advice, but its a matter of how complex the advice I'm seeking is.

WRT cost or value, to be honest I didn't know the cost spectrum until I saw your post GPH. I've been self employed for about 16 years and like cove, I've been shifting the fund into more conservative spaces as I get longer in the tooth.

 

[JohnK]

Re: The totally off-topic thread

If you are experiencing a decrease in your account it will have little or nothing to do with fees. (Unless you are invested in fixed interest which is about as silly as you can get , or those fees are very , double digit high) the real reason your funds have decreased in "value" is market movement.
This is where "most" people make their silliest mistake, they sell low , thereby locking in their decrease (loss) .
After over 30 years in this business I have heard stories like this before, and giving you the benefit of the doubt I will say only this. There is much more to this story than you have told here.

The fund is supposed to be moderate growth. At 0.28% for the year that's poor growth. And the fees are around $300-$400. Don't have them in front of me now.

In 2007 had ~$48,000 in MLC nest egg which has since change names. I have just gone over $60,000 9 years later. That's very poor and not going to fund any retirement.

What happens when the next financial crisis hits? We'll owe them money to pay the salaries?

This huge Ponzi scheme cannot keep going this way.

 

[Denali]

Re: The totally off-topic thread

... Abdicating responsibility for your super and how it's run b.....

My husband has always had regular meetings with his fund manager/rep with a retire at 55 goal & a 30yr retirement plan.

He finishes work in Jan at 56 and wants to KDR our house (God save me on both counts)

Like anything, I wish I was smarter when I was in my 20s